Magyar Bancorp (NASDAQ:MGYR) and People’s United Financial (NASDAQ:PBCT) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, dividends, risk, institutional ownership, analyst recommendations, earnings and profitability.

Dividends

People’s United Financial pays an annual dividend of $0.71 per share and has a dividend yield of 4.4%. Magyar Bancorp does not pay a dividend. People’s United Financial pays out 54.2% of its earnings in the form of a dividend.

Profitability

This table compares Magyar Bancorp and People’s United Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Magyar Bancorp 9.78% 5.31% 0.43%
People’s United Financial 23.64% 8.16% 1.06%

Earnings & Valuation

This table compares Magyar Bancorp and People’s United Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Magyar Bancorp $26.47 million 2.55 $2.03 million N/A N/A
People’s United Financial $1.92 billion 3.33 $468.10 million $1.31 12.25

People’s United Financial has higher revenue and earnings than Magyar Bancorp.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Magyar Bancorp and People’s United Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Magyar Bancorp 0 0 0 0 N/A
People’s United Financial 0 4 1 0 2.20

People’s United Financial has a consensus price target of $19.88, indicating a potential upside of 23.83%. Given People’s United Financial’s higher probable upside, analysts clearly believe People’s United Financial is more favorable than Magyar Bancorp.

Volatility & Risk

Magyar Bancorp has a beta of 0.04, meaning that its share price is 96% less volatile than the S&P 500. Comparatively, People’s United Financial has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.

Institutional and Insider Ownership

17.7% of Magyar Bancorp shares are held by institutional investors. Comparatively, 73.0% of People’s United Financial shares are held by institutional investors. 3.9% of Magyar Bancorp shares are held by insiders. Comparatively, 2.4% of People’s United Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

People’s United Financial beats Magyar Bancorp on 11 of the 14 factors compared between the two stocks.

About Magyar Bancorp

Magyar Bancorp, Inc. operates as the mid-tier stock holding company for Magyar Bank that provides various banking products and services to families and businesses in New Jersey, the United States. Its product portfolio includes various deposit products, such as demand, NOW, money market, savings, and retirement accounts, as well as certificates of deposit; and loan products comprising one-to four-family residential mortgage loans, multi-family and commercial real estate mortgage loans, home equity loans and lines of credit, commercial business loans, small business administration loans, and construction loans, as well as consumer loans, which primarily include secured demand loans. The company also provides non-deposit investment products and financial planning services, including insurance products, fixed and variable annuities, and retirement planning for individual and commercial customers; and investment securities. It operates through seven branch locations in New Brunswick, North Brunswick, South Brunswick, Branchburg, Bridgewater, and Edison; and a loan product office in New Jersey. The company was founded in 1922 and is headquartered in New Brunswick, New Jersey. Magyar Bancorp, Inc. is a subsidiary of Magyar Bancorp, MHC.

About People’s United Financial

People's United Financial, Inc. operates as the bank holding company for People's United Bank, National Association that provides commercial banking, retail banking, and wealth management services to individual, corporate, and municipal customers. The company operates in two segments, Commercial Banking and Retail Banking. The Commercial Banking segment offers commercial real estate lending, commercial and industrial lending, and commercial deposit gathering services. This segment also provides equipment financing; cash management, correspondent banking, and municipal banking services; and institutional trust, corporate trust, private banking, and commercial insurance services. The Retail Banking segment offers consumer lending, including residential mortgage and home equity lending; and consumer deposit gathering services. This segment also provides brokerage, financial advisory, investment management, life insurance, and non-institutional trust services. In addition, the company offers online banking, investment trading, and telephone banking services. It operates through a network of 422 branches in Connecticut, southeastern New York, Massachusetts, Vermont, Maine, and New Hampshire, as well as 607 ATMs. The company was founded in 1842 and is headquartered in Bridgeport, Connecticut.

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